28 August 2011
The world economy is in shambles and about to get worse, according to even mainstream economists. How bad is anybody's guess.
Some things, however, are certain: the recovery
that politicians have been promising for years existed only in their heads.
The reality of the situation is now apparent to millions of people across
the globe, who, before, clung to the empty promises of economic recovery.
This newfound consciousness will inevitably find expression in the political
realm and, more importantly, the streets.
Politicians are blaming "the markets" for demanding austerity measures, but "markets" are simply places where wealthy people invest their money.
To guarantee a profitable return on their money these investors demand that labor laws be squashed and social programs be eliminated, all over the world. Spain, for example, is one of many countries having austerity measures forced down their throats.
To summarize, creating new laws that enable
Spanish corporations to work their workers harder will be better for
In the United States, these policies find
expression in the attack against public-sector unions and the targeting of
Social Security, Medicare and Medicaid for cuts, while mass unemployment is
allowed to act as a very efficient way to lower wages for all workers.
When workers' wages are lowered and social programs are decimated, working people and the poor are left with little money for any purchases other than the bare necessities. Without consumer demand for their products, corporations curtail operations even more.
This global dynamic has been decades in the
making, with the recession having finally forced the issue into the
Now, all of Europe is suffering because banks
and corporations demand a more profit-friendly business environment:
universal health care and education programs are in jeopardy, plus wages and
other benefits are under attack.
The Great Recession has already bankrupted the banks and corporations who were not fit enough to survive under a crumbling market economy. The existing companies are thus forced to squeeze more work for less pay out of their workers, since labor is the most flexible cost of any business.
Pushing labor costs down - and by extension
cutting social programs - is thus the priority of the corporations and their
paid-for politicians across the globe, since the global economy is tightly
connected and they all play by the vicious rules of the market. In fact, the
intensity with which the corporate elite is pursuing these policies is a
reflection of their negative outlook for the global economy.
The 2008 recession was not a temporary
phenomenon, but the ushering in of a new period in which
the corporate elite
attempt to restructure social relations, meaning that past assumptions
regarding wages and social programs must be destroyed, as a new, more
profitable equilibrium is sought between the corporate elite and working
The riots in London are an expression of this, as are the mass demonstrations throughout Europe as well as the Middle East. In the United States, democracy is circumvented via the so-called Super Congress, whose duty it is to cut Medicare, Medicaid and Social Security.
Austerity programs throughout Europe are being
implemented against the wishes of the general working populations.
It's not by coincidence that taxing the rich is
rarely used in austerity plans; and when, on rare occasions, the rich are
taxed, it's at low levels with high publicity, so the angry public will
think the illusion of "shared sacrifice" is a reality.
It is doubtful that the Bush tax cuts will be ended, but if they were, it would be insufficient. Working people must demand that taxes on the rich be raised to at least pre-Reagan levels (70 percent), while President Eisenhower levels would be best (90 percent).
Over the decades, the tax burden has shifted
dramatically, causing wealth to accumulate into the bank accounts of the top
1 percent of the population, the same people who are now demanding that
social programs be destroyed so that their investments are secured and their
corporate profits remain high.
Fortunately, the AFL-CIO is organizing actions for the first week of October to demand jobs and oppose cuts to,
Many within the labor movement are calling for massive demonstrations across the country for October 1.
It will take these types of actions to unite working people to fight for a positive solution to the economic crisis.